My column for the October issue of Builder & Developer magazine is now online. Since this month's issue of the magazine focuses on affordable housing, I addressed the very important role of the public sector in making affordable housing even possible. An excerpt:
The national tax credit program, which for the past 20 years has provided a critical way to finance low-income rental housing, is now under duress because investors such as Fannie Mae and Freddie Mac exited the market last year, thereby taking 40% of the funding off the market. Much of the balance was previously funded by the banking industry, most of which no longer has profits against which to offset taxes.
The result is hundreds of stalled projects waiting for funding to make up for 3 million affordable housing units destroyed, converted to condominiums or upgraded to market-rate rentals since 2003. In some places, the waiting lists for assistance are so long that new applications are being denied.
To address this deteriorating situation, the Treasury Department said in May that it would funnel $5 billion in federal stimulus dollars to buy unsold tax credits for affordable housing projects approved since 2008; developers who wish to redeem unsold credits can also exchange them for government grants, but only at a ratio of 85 cents to the dollar...
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